Corporate Governance Report
Compliance with the code of Corporate Governance forms an integral part of the Company's philosophy. Unichem firmly believes that any meaningful policy on Corporate Governance must provide empowerment to the management of the Company and simultaneously create a mechanism of checks and balances that ensure that the decision making powers vested in the management are not misused and are exercised with care and responsibility to meet stakeholders' aspirations and societal expectations. The core principles of Corporate Governance i.e. trusteeship, transparency, empowerment, accountability and control form the cornerstone of Unichem's Corporate Governance philosophy. The Company continues to focus its resources, strengths and strategies to achieve the highest standards of Corporate Governance and endeavours to implement the code of Corporate Governance in its true spirit.
As per the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) and applicable provisions of the Companies Act, 2013, a report on Corporate Governance is detailed below:
Board of Directors
Composition, attendance of Directors at Board Meetings and the last Annual General Meeting (AGM), other Directorships and Memberships and/or Chairmanships held by each Director
As on March 31, 2016, Unichem's Board comprised of 6 (six) Directors, viz., the Chairman & Managing Director and 5 (five) Non-Executive and Independent Directors. Unichem's Board met 5 (five) times during the year under review viz. May 9, 2015, July 11, 2015, October 17, 2015, January 23, 2016 and March 9, 2016 as given in Table-1. The intervening period between two Board Meetings was well within the time limit prescribed in the Companies Act, 2013 and the Listing Regulations.
Independent Directors' Meeting
During the year under review, the Independent Directors met on January 23,2016 inter alia, to:
a. Review the performance of Non-independent Directors and the Board as a whole;
b. Review the performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors and
c. Assess the quality, quantity and timelines of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform its duties.
All the Independent Directors attended the Meeting.
Familiarisation programme for Independent Directors
As and when a new Independent Director is appointed, the Company takes steps to familiarise the Independent Director with the Company, his/her roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc., through various programmes. By way of an introduction, the Company presents to the Director a corporate CD which encompasses the history and operations of the Company.
Compliances required from the Directors under the Companies Act, 2013 and the Listing Regulations are explained to them in detail. Senior Management makes presentations periodically to familiarise the Directors with the strategy and operations of the Company.
The details of such familiarisation programme have been displayed on the website of the Company and the weblink of the same is:
Compliance with Code of Business Conduct and Ethics
The Company has adopted a Code of Business Conduct and Ethics. The said Code is posted on the Company's website and the weblink of the same is:
All Board members and Senior Management Personnel have affirmed compliance with the said Code for the year ended March 31, 2016. A declaration to this effect signed by the Chairman & Managing Director is given below:
Declaration on Code of Business Conduct and Ethics
"In accordance with Regulation 26 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, I hereby confirm that the Board of Directors and the Senior Management Personnel have affirmed compliance with the Code of Business Conduct and Ethics for the financial year ended March 31,2016".
The Audit Committee met on May 9, 2015; July 11, 2015; October 17,2015 and January 23,2016. The composition of the Committee as on March 31,2016 and the details on the number of Audit Committee Meetings held and attended by the Members during the financial year 2015- 2016 are given in Table-2.
The terms of reference of the Committee are wide enough to cover matters specified for Audit Committees as given under Section 177 of the Companies Act, 2013 and Regulation 18 of the Listing Regulations.
The Chief Finance & Compliance Officer and Chief Internal Auditor & Compliance Officer and a representative of the Statutory Auditors and the Cost Auditor were regular invitees to the Meetings.
The Company Secretary acts as Secretary to the Committee.
Nomination and Remuneration Committee
The composition of the Nomination and Remuneration Committee during the financial year 2015-2016 is given in Table -3.
The terms of reference of the Committee are wide enough to cover matters specified for the Committee as given under Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations. The said Committee met on May 9,2015 and July 11,2015.
The Company Secretary acts as Secretary to the Committee.
Nomination and Remuneration Policy
The Company's Nomination and Remuneration Policy considers human resources as its invaluable assets. The said Policy aims to pay equitable remuneration to all Directors, Key Managerial Personnel (KMP) and employees of the Company, to harmonize the aspirations of human resources consistent with the goals of the Company. The Remuneration Policy for all employees is designed to attract talented personnel and remunerate them fairly and responsibly, this being a continuous ongoing exercise at each level in the organization.
Whole Time/Managing Director
The Company pays remuneration by way of salary, perquisites and allowances (fixed component) and commission (variable component) to its Whole Time/ Managing Director. A proper balance between fixed and variable component is aimed at. Salary is paid based on the recommendation of the Nomination and Remuneration Committee and as approved by the Board of Directors, subject to the approval of the shareholders within the limits stipulated by the Companies Act, 2013 and the Rules made thereunder. The remuneration paid to the Whole Time Director is determined keeping in view the industry benchmark and the relative performance of the Company compared to the industry performance.
Non-Executive Directors receive sitting fees for attending Meetings of the Board and its Committees as per the provisions of the Companies Act, 2013 and the Rules made thereunder. They have been allotted Employee Stock Options under the erstwhile Companies Act, 1956. However, they will not henceforth be eligible for Employee Stock Options, if any, introduced by the Company. Besides payment of sitting fees and dividend on equity shares if any, held by the Directors no other remuneration is paid to the Non-Executive Directors. The Nomination and Remuneration Committee may recommend to the Board, the payment of commission taking into account the evaluation of the performance of the Directors.
Key Managerial Personnel (KMP) and other Employees
The remuneration of KMP other than the Whole Time Director and other Senior Managerial Employees largely consists of basic salary, perquisites, allowances and performance incentives (wherever paid). Perquisites and retirement benefits are paid according to the Company policy. The components of the total remuneration vary for different grades and are governed by the industry pattern, qualification and experience, merits and performance of each employee. The Company while deciding the remuneration package takes into consideration the current employment scenario and remuneration package prevalent in the industry and peer group companies.
Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 (10) of the Listing Regulations, the Board has carried out an annual performance evaluation of the working of its own performance, its Committees and the Directors individually. The performance evaluation of Independent Directors was done by the entire Board of Directors and in the evaluation the Directors who were subject to evaluation did not participate. A structured questionnaire was prepared after taking into consideration inputs received from the Directors covering various aspects of the Board's/Committees' functioning.
The evaluation of the Directors was done on various parameters such as vision and strategy, Board participation, Board disclosures of interests, review of risk management policies, evaluating plans with reference to risk and return, Good Governance and Leadership skills. The Directors expressed their satisfaction with the evaluation process.
Stakeholders' Relationship Committee
The composition of the Stakeholders' Relationship Committee and the details of the number of Meetings held and attended by the Members during the financial year 2015-2016 are given in Table-5. The Committee focuses on shareholders' grievances and strengthening of investor relations.
The Stakeholders' Relationship Committee met on May 9, 2015; J uly 11,2015; October 17,2015 and January 23,2016. During the year 32 (thirty two) complaints were received from shareholders and investors. All the complaints have been resolved to the satisfaction of the complainants and no investor complaint was pending at the beginning or at the end of the year. The Company has acted upon valid requests for share transfers received during the year and no such request is pending.
The Company has a dedicated e-mail id firstname.lastname@example.org where investors and the other stakeholders can address their queries and grievances.
Mrs. NeemaThakore (Head - Legal & Company Secretary) is the Compliance Officer. She also acts as Secretary to the Committee.
Pursuant to Regulation 21 of the Listing Regulations, the Company does not come in the top 100 entities which has to mandatorily constitute a Risk Management Committee. However the Company has procedures for risk assessment and minimisation.
Corporate Social Responsibility Committee (CSR)
The composition of the Corporate Social Responsibility Committee and the details on the number of Meetings held and attended by the Members during the financial year 2015-2016 are given in Table-6. The terms of reference of the said Committee broadly comprise the following:
a. To review the existing CSR Policy and to make it more comprehensive so as to indicate the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013 and
b. To provide guidance on various CSR activities to be undertaken by the Company and to monitor their progress.
Meetings of the Committee were held on May 9, 2015, July 11, 2015 and January 23, 2016. The Company Secretary acts as Secretary to the Committee.
CEO and CFO Certification
The CEO and CFO have inter alia certified to the Board of Directors, the accuracy of financial statements and adequacy of internal controls for financial reporting as required under Regulation 17(8) of the Listing Regulations for the year ended March 31, 2016 and the same was placed before the Board of Directors at its Meeting held on May 20,2016.
Related Party Transactions
There were no materially significant transactions with Related Parties during the financial year, which were in conflict with the interest of the Company at large. The Company has in place a policy on Related Party Transactions and the same is displayed on the Company's website and the weblink of the same is:
Details of Non compliance
During the past 3 (three) years there have been no instances of non compliance by the Company with the requirements of the Stock Exchanges, Securities and Exchange Board of India (SEBI) or any other statutory authority on any matter related to capital markets. 3, 2016.
The Company has formulated a Policy on material subsidiary and the same is displayed on the Company's website and the weblink of the same is http://www.unichemlabs.com/Policies-Code-of- Conduct/Policy_on_Material_Subsidiaries.html
Whistle Blower Policy
The Company has in place a Whistle Blower/Vigil Mechanism through which its Stakeholders, Directors and Employees can report their genuine concerns about unethical behaviour and actual or suspected fraud or violation of the Company's Code of Business Conduct and Ethics. The said Policy provides for adequate safeguards against victimization and also direct access to the Audit Committee. The e-mail id for reporting genuine concerns is email@example.com
Compliance with the Mandatory Requirements of the Listing Regulations
The Company has complied with all the mandatory requirements specified in Regulations 17 to 27 and clauses (b) to (i) of sub regulation (2) of Regulation 46 of the Listing Regulations.
Adoption of Non Mandatory Requirements
The Company has not adopted the non mandatory requirements of the Listing Regulations.
Management Discussion and Analysis Report
The information required under the Management Discussion and Analysis Report is separately given in this Annual Report.
Brief profile of Directors seeking appointment/reappointment
As required, a brief profile and other particulars of the Director retiring by rotation/re-appointment is given in the Notice of the 53rd Annual General Meeting and forms a part of this Report.
Commodity price risk or foreign exchange risk and hedging activities
During the financial year ended March 31, 2016, the Company managed its foreign exchange risk and hedged to the extent considered necessary/permitted. The Company enters into forward contracts for hedging foreign exchange exposures against exports and imports. The details of foreign currency exposure are disclosed in the Financial Statements.
Means of Communication
a. The Unaudited quarterly/half yearly results are announced within 45 (forty five) days of the close of the quarter. The audited annual results are announced within sixty days from the closure of the financial year as per the requirement of the Listing Regulations.
b. The approved financial results are forthwith sent to the Stock Exchanges and are published in a national English newspaper. In addition, the same are published in a local language (Marathi) newspaper, within 48 (forty eight) hours of approval thereof.
Presently the same are not sent to the shareholders separately.
c. The Company's financial results and official press releases are displayed on the Company's website: www.unichemlabs.com
d. Any presentation made to the institutional investors and / or analysts are also posted on the Company's website.
e. The quarterly results, shareholding pattern, quarterly compliances and all other corporate communication to the Stock Exchanges viz. BSE Limited and National Stock Exchange of India Limited are filed electronically. The Company has complied with filing submissions through BSE's BSE Listing Centre. The said information is also filed electronically with NSE through NSE's NEAPS portal.
f. A separate dedicated section under "Investors", on the Company's website gives information on unclaimed dividends, shareholding pattern, quarterly/half yearly results and other relevant information of interest to the investors/public.
General Shareholder Information
Date, Time and Venue of 53rd AGM
Time: 3.00 p.m.
Venue: Hall of Culture, Nehru Centre Dr. Annie Besant Road, Worli Mumbai-400 018
Financial Year - April 1,2015 to March 31,2016
Dates of Book Closure
July 18,2016 to July 23,2016 (both days inclusive)
Dividend Payment Date
Interim Dividend of Rs. 2/- (100%) per share having a face value of Rs. 2/- each, declared and paid by the Board of Directors on March 28, 2016 has been confirmed as Final Dividend for theyear ended March 31,2016.
Stock Exchanges on which shares are listed
The Bombay Stock Exchange Limited (BSE)
National Stock Exchange of India Limited (NSE)
The Annual Listing Fees for the year 2015-2016 are paid by the Company.
The Dividends for the following financial years remaining unclaimed for 7 (seven) years, will be transferred to the Investor Education and Protection Fund. Table-8 provides the transfer dates. Shareholders who have not claimed their Dividends are requested to do so before these are statutorily transferred. Shareholders who have not encashed their Dividend warrants are requested to immediately approach the Investor Relations Department of the Company for issue of duplicate dividend warrants.
Registrar and Share Transfer Agents (RTA)
Link Intime India Pvt. Ltd.
C-13, Pannalal Silk Mills Compound, LBS Marg Bhandup (West), Mumbai-400 078
Tel: (022) 2594 6970, Fax: (022) 2594 6969 E-mail Id.: firstname.lastname@example.org
Share Transfer System
Share transfers are registered and returned within a month from the date of receipt, subject to the documents being valid and complete in all respects. Share certificates duly endorsed are issued or transferred to all those shareholders who opt to hold shares in physical mode.
The Company has delegated the authority to approve share transfers to its RTA, Link Intime India Pvt. Ltd. The Company obtains from a Company Secretary in Practice half-yearly certificate of compliance with the share transfer formalities as required under Regulation 40 (9) of the Listing Regulations and files a copy of the certificate with the Stock Exchanges.
There are no legal proceedings pending against the Company before the Company Law Board in respect of dispute over title to shares in which the Company has been made a party.
Dematerialisation of Shares and Liquidity
The Company's equity shares form part of the dematerialisation segment for all investors. As on March 31, 2016, 96.40% of the paid up capital was held in dematerialised form with National Securities Depository Limited and Central Depository Services (India) Limited.
Outstanding GDRs/ADRs/Warrants or any Convertible instruments, conversion date and likely impact on equity
The Company has not issued any GDRs/ADRs/Warrants or any convertible instruments.
Financial Calendar (Tentative)
Results for the Quarter and year ending on Tentative date
Unaudited results for the first quarter ending June 30, 2016 Third week of July 2016
Unaudited results for the second quarter and half year ending September 30, 2016 Third week of October 2016
Unaudited results for the third quarter and nine months ending December 31, 2016 Third week of January 2017
Audited results for year ending March 31, 2017 Third week of May 2017
C 31-32, Industrial Area
Meerut Road, Ghaziabad - 201 003Uttar Pradesh
Plot No. 17A & 18 Pilerne Industrial Estate Pilerne Bardez - 403 511, Goa
Bhatauli Kalan District Solan, Baddi - 173 205Himachal Pradesh
NH- 31A, Bagheykhola, Majithar Rangpo, East Sikkim – 737 138
99, MIDC Area, RohaDistrict Raigad - 402 116Maharashtra
Plot No. 197, Sector –IPithampurDistrict Dhar - 454 775Madhya Pradesh
Address for correspondence
Registered and Corporate Office
Unichem Bhavan, Prabhat Estate, Off S. V. Road Jogeshwari (West), Mumbai - 400102
Tel.: (022) 6688 8333 Fax.: (022) 2678 4391 Website: www.unichemlabs.com
For Secretarial matters
Ms. Shalini Kamath / Mr. Dilip Bhor
Unichem Bhavan, Prabhat Estate, Off S. V. Road Jogeshwari (West), Mumbai - 400102
Tel.: (022) 6688 8478/439 E-mail Id.: email@example.com
The Statutory Auditors Certificate on compliance with the conditions of Corporate Governance is annexed herewith.
For and on behalf of the Board of Directors,
Dr. Prakash A. Mody
Chairman & Managing Director
May 20, 2016